At a time when we’re all looking for bargains, is there a catch to buying a $150 Nikon Coolpix digital camera for 34 cents? Or nabbing a $699 Apple 16GB iPhone for $8.06?

There is: While you stand to get a great bargain, you could be bidding against several thousand others in an online auction for one item, and each time you place a bid, it will cost anywhere from 60 cents to $1.

E-commerce is taking on a different spin with sites such as Swoopo and GoBid that appeal to the bargain hunter with a competitive drive. The giveaway prices on name-brand products, the limited and timed offerings, strategy play and fast pace attract shoppers willing to bid money for the chance to buy something at a fraction of its retail cost.

“It’s entertainment shopping,” said Chris Bauman, 31, the ex-Marine who is Swoopo.com‘s director of marketing and business development for North America. The German company launched its American presence last fall, with headquarters in Silicon Valley. It is scheduled to launch in Canada in early June.

Lael Sturm, 37, the cofounder and chief operating officer of San Francisco-based GoBid.com, had a similar analogy: “This is shopping as a sport.” His company went live in February. “The timing is great, given the recession.”

Swoopo and GoBid are two of several new “penny auction” sites where consumers can bid for flat-screen TVs, laptops, cameras and game consoles as well as jewelry and gift cards for prices that start as low as a penny.

How do these auctions differ from those on eBay? The sites are selling the merchandise, whereas eBay is a place where sellers and buyers meet — it holds no inventory.

But the biggest difference is that to participate in a penny auction, shoppers must buy a bundle of bids and use one every time they raise their virtual paddle. Bids cost 60 cents to $1 each and are bought in packs of 10 to 700, depending on the site.

The auction companies make much of their money not from sales of merchandise but from the purchase of these bids.

While critics have questioned this form of e-commerce as a blink away from gambling, others have called it a smart business model for the Web at a time when new moneymaking ideas are scarce.

“Good for them for figuring it out; it’s a brilliant business model that’s created retail as a game,” said Mike Kraus, retail expert for AllBusiness.com, an online source for business advice and solutions. He sees it as the next iteration of online auctions. “Instead of a one-time fee, it’s an every-time fee.”

Scot Wingo, CEO of ChannelAdvisor, which helps retailers sell on the Internet, disagrees, saying the format confuses consumers with its “virtual currency,” and that it’s unclear whom the consumer is bidding against.

“It’s closer to gambling than to auctions,” he said. “It’s like putting quarters in a slot machine.”

“The concept of bidding can’t be equated to gambling,” counters Swoopo’s Bauman. Most days, about 300 items are up for bid for 24 hours at a time. “We are not a gambling site — we don’t want to be that, ever. We are an e-commerce site.”

Swoopo launched in 2005 in Munich and later set up sites in the U.K., Spain and Austria.

The U.S. site appears to have solid Silicon Valley credentials. The Cupertino operation’s backers include Sand Hill Road venture capital firm August Capital and Wellington Partners, a European-based VC company with offices in Palo Alto, Bauman said.

Swoopo has more than 2.2 million registered users, 268,000 in the United States. It had $29 million in revenue in 2008, Bauman said.

“We’re in Silicon Valley because in order to get the right products to people, we have to have our feet on the street,” said Bauman, sitting in Red Rock Coffee on Castro Street in Mountain View, across from the building where Swoopo and its 11 employees will move next month.

He looks around at the dozen or so customers with laptops and points out that most have Apple MacBooks or Dells. Choosing popular brands like these to sell means more bids — and more revenue for Swoopo.

“We’re not an evil eBay,” he said, referring to the nickname some have given his site. “We’re a smart Swoopo.”

GoBid launched in February, identical in concept to Swoopo but with a slight variance in offerings, pricing and tools, such as live chat support and a percentage of profits going to charity.

“While eBay might be considered more of a shopping experience, GoBid is a fast-moving game,” said Sturm, a native San Franciscan with an online marketing background. He and his business partner, Jose Calleja Jr., came across the penny auction concept while traveling in Israel a few years ago.

“We thought there was no reason that this won’t work in the U.S.,” Sturm said.

The company has five employees and contracted help, he said. It has no venture capital funding.

“We’re a boutique operation — not exactly profitable yet,” he said. GoBid offers about 20 products a day and includes fashion items, such as Coach handbags, that appeal to women. The site has about 5,000 registered users.

While the smaller company, Sturm said bidders on his site have a better chance because there is less competition. Bauman said Swoopo has a “beginner” category for newbies, which offers less competitive items with fewer bidders.

Recently offered: an Obama Chia Pet planter, which retails for about $20.

HOW “Penny Auction” Sites WORK

The sites offer new televisions, computers, game consoles, appliances, handbags, gold bars and more for starting prices of a penny to 15 cents, depending on the site.To “win” a product, shoppers must first buy a bundle of 10 to 700 bids for 60 cents to $1 each. Shoppers use one each time they place a virtual bid on a product. Each bid raises the price of the item by a penny to 15 cents, depending on the site. Some have automatic bidding functions similar to eBay. Doing the math and not getting carried away is important: The final price of a product that retails for $100 might be $29, but the total price paid could be much more, depending upon the number of bids used. If a shopper bids 10 times at $1 a bid, for instance, the total price paid would jump to $39. And, there is the real possibility of using all your bids without getting the product. Auction winners generally get their item for about 65 percent off retail but could save as much as 98 percent if there are few bidders.Since the sites make the bulk of their revenue from the purchase of bids, they profit most when they feature a product that elicits a bidding war.There”s no one winning strategy, but successful ones include bidding early to establish what you”re willing to pay, so that shoppers just looking for an incredible bargain won”t bid against you; or, more commonly, bidding only on items with a few seconds left on the clock.